Fifth Third Bank acquires Rize Money, an embedded payment platform

According to the official press release, the acquisition is part of Fifth Third Bank’s growth strategy. Embedded payments are an important component of the Treasury Management business that the financial institution features. By acquiring Rize Money, Fifth Third Bank seeks to further capitalise on technology and innovation to cater to the needs of its clients.

Rize Money specialises in providing technology companies with the necessary infrastructure to create, launch, and extend the reach of financial services and products via a single API. The platform allows for services such as opening deposit accounts, accessing payment rails, and utilising risk management tools.

The relevance of embedded finance today

The embedded finance market has seen constant development in the last few decades, as embedding financial services within non-finance apps and websites specifically caters to consumers’ needs.

The main reasons behind the explosion in popularity that embedded finance is currently seeing are the fact that the costs of integrating this method are lower than before and that the technology used, Application Programming Interface (or API), is easily available. 

Most incumbent banks interested in integrating embedded finance solutions are, however, facing some difficulties. For instance, the legacy core systems that these financial institutions have can hamper the performance, growth potential, and responsiveness of the system. Moreover, these banks might find it difficult to find the necessary partner servicing capability that can support the partners they want to embed with. As the platform for embedded financing is expanding, experts argue that early players might secure long-lasting market share.

Making use of embedded finance services can be equally challenging for businesses. Some of the common difficulties they might encounter have to do with not employing the right strategy due to a lack of understanding of what the process entails, integrating financial offerings without creating difficulties for the customer, and fostering reliability and assurance for the end customer.